Super for Housing Interim Report

The Senate Economics Committee has handed down its Interim Report into existing and proposed super for housing policies as part of the Inquiry into improving consumer experiences, choice, and outcomes in Australia’s retirement system.

The Inquiry was recalibrated to assess how policy could improve retirement outcomes by letting Australians use their superannuation to purchase a home.

In the course of our inquiry, it has been made clear to the Committee that having a secure retirement depends heavily on your home ownership status, not your super balance.

We looked at existing and proposed super for housing policies to determine what can be done to help Australians into a first home

The Committee made two recommendations in particular to allow first home buyers to access more of their super than has been previously proposed, with options for a higher maximum withdrawal cap and without a maximum threshold.

Rampant inflation under Labor means that the Committee has had to re-examine previously proposed thresholds and caps, to ensure the policy can be effective for first home buyers.

As canvassed in the report, the Committee received evidence from actuaries Michael Rice AO and Jonathan Ng that a much higher cap would be appropriate so that first home buyers have enough flexibility to withdraw the adequate amount required to form a deposit.

Analysis from Mr Rice and Mr Ng found that for a 35 year old who used super to form a 20 per cent deposit on a $800,000 unit, the value of that equity in the unit in today’s dollars would be worth $1.2 million 30 years later at the point of retirement. This is compared to only $319,000 had it remained in superannuation.

The Committee also recommended that first home buyers who have used the proposed scheme to purchase a first home should be allowed to use the proceeds to purchase their next home rather than having to re-contribute the withdrawn amount immediately back into super. By eliminating red-tape, the policy can work better for Australians who wish to sell their first home and relocate.

We also recommended the following other measures for consideration:

• That the First Home Super Saver Scheme be expanded and simplified;
• That superannuation be eligible as collateral for a home loan; and
• That APRA investigate the feasibility of superannuation-based shared equity schemes.

A link to the report can be found here: https://www.aph.gov.au/Parliamentary_Business/Tabled_Documents/5852

The Committee will now be examining other policies to advance home ownership in retirement, such as letting Australians use their superannuation as a mortgage offset.

We will be seeking submissions from experts and the community on this matter.

[Ends]